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Compaq goes after LCDs

The leading PC maker aims to become the top supplier of flat-panel desktop monitors, paving the way for a larger LCD market.

Leading PC manufacturer Compaq Computer (CPQ) is aiming to become the top supplier of flat-panel desktop monitors, paving the way for a larger LCD market in coming years.

With the announcement of a strategic partnership with Mitsubishi Electric and its LCD manufacturing subsidiary, Advanced Display, Compaq says it will be able to drive down prices of LCD displays while aggressively incorporating the latest technology into its designs.

"Our most likely scenario shows LCDs having eight percent of the [total desktop] market in the year 2002," said David Mentley, director of display industry research at San Jose, California-based Stanford Resources, a market research firm. And, he said, "Mitsubishi does make a very good large [LCD] display."

Currently, LCDs are widely used in notebook PCs but rarely as a desktop monitor--despite their thin design and light weight--because they are priced significantly more than the ubiquitous but bulkly CRT (cathode ray tube) monitor. However, improvements in the manufacturing of LCDs should boost the adoption of these displays on the desktop, according to Stanford Resources.

Mainstream LCDs used in notebook PCs now have a maximum diagonal size of 12.1 inches, roughly equivalent to a 14- or 15-inch CRT in viewable area. The 13- and 15-inch sizes that Compaq is expected to get from Mitsubishi for use with desktop PCs will rival 15- and 17-inch CRT monitors in viewable area.

By virtue of Compaq's size, the company is poised to drive a trend that will eventually see increasing numbers of flat-panel displays on corporate and consumer desktops. In addition to being the largest vendor of PCs worldwide, the company also sells more branded monitors than anyone else, according to research from Dataquest. Compaq already sells a "boutique" consumer PC with a built-in LCD display.

Initially, though, the company says the displays will be targeted for use in the financial services and health care industries where desktop space needs to be saved. For example, stockbrokers often need to have multiple monitors on a desk.

There are other considerations as well. In hospitals, the displays are also used because they don't create electromagnetic interference with medical equipment.

Compaq says the new LCD monitors will offer high resolutions and "rich color quality." No new products were officially announced, however.

Compaq is already offering one desktop Presario model with a built-in 12.1-inch LCD panel.